Corporate Taxation

Switzerland participates in the global minimum taxation of companies – not entirely voluntarily

On 1 July 2021, the OECD announced that the member states had agreed on the parameters for the taxation of large international companies. The key point is a global minimum taxation of 15% for companies with an annual turnover of more than EUR 750 million (Pillar 2). The shift of the right of taxation to the market states has moved into the background and concerns companies with an annual turnover of more than EUR 20 billion and a profit margin of more than 10% (pillar 1).

Pillar 1 (“consumption-based taxation”) affects only a very small number of companies in Switzerland, while Pillar 2 (“minimum taxation”) will affect around 200 companies. In addition, there are numerous subsidiaries of foreign groups that will be affected by the minimum taxation.

Switzerland has endorsed both approaches under the OECD’s Inclusive Framework. However, it has argued that the interests of small, innovative countries should be taken into account in the final design and implementation of the provisions. Furthermore, Switzerland has stated that the implementation of the corresponding measures will take some time.

The OECD aims to develop a detailed implementation plan by October 2021.

At the national level, work is already underway on possible approaches to maintain Switzerland’s attractiveness as a business location. The Federal Department of Finance plans to be able to present initial proposals to the Federal Council in the 1st quarter of 2022.